Cogent Comms (CCOI) AI Stock Analysis

• Market Cap: $2.78B
• Dividend Yield: 7.24%
• Average Volume (3M): 644.05K
• Price to Earnings (P/E): 102.8
• Beta (1Y): 0.47
• Revenue Growth: 10.12%
• EPS Growth: -115.93%
• Country: US
• Employees: 1,916
• Sector: Communication Services
• Sector Strength: 83
• Industry: Telecommunications Services
• EPS (TTM): -4.30
• Shares Outstanding: 49,325,993
• 10 Day Avg. Volume: 445,196
• 30 Day Avg. Volume: 644,048
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 2.07
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 37.92
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $81.00
• Price Target Upside: 43.46% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

Cogent Comms' overall stock score is primarily influenced by significant financial challenges, including high leverage and unstable cash flow. While the earnings call showed some positive growth and cost-saving measures, declines in key revenue streams and sales productivity remain concerns. The stock's bearish technical indicators and negative P/E ratio further weigh on the score, though a high dividend yield offers some appeal to investors.

Positive Factors

Data Center Monetization

Potential monetization of underutilized data center and IPv4 assets could generate significant proceeds and reduce net debt.

Financial Performance

Core growth is anticipated to improve, leading to higher cash flow, better leverage, and a decreasing dividend payout in the future.

Network Upgrades

The completion of network upgrades and faster provisioning are expected to boost growth, driven by unique routes and high overlap with existing customers.

Negative Factors

Earnings Expectations

Revenue was in line with estimates, but adjusted EBITDA missed expectations.

Execution Risks

Scaling in waves has been slower, which is a key driver of sentiment and contributes to execution risk.

Waves Launch

The Waves launch is clearly off to a slow start.

Cogent Comms Business Overview & Revenue Model

Company Description

Cogent Communications Holdings, Inc., through its subsidiaries, provides high-speed Internet access, private network, and data center colocation space services in North America, Europe, Asia, South America, Australia, and Africa. The company offers on-net Internet access and private network services to law firms, financial services firms, and advertising and marketing firms, as well as heath care providers, educational institutions and other professional services businesses, other Internet service providers, telephone companies, cable television companies, Web hosting companies, media service providers, mobile phone operators, content delivery network companies, and commercial content and application service providers. It also provides Internet access and private network services to customers that are not located in buildings directly connected to its network; and on-net services to customers located in buildings that are physically connected to its network. In addition, the company offers off-net services to corporate customers using other carriers' circuits to provide the last mile portion of the link from the customers' premises to the network. Further, it operates data centers that allow its customers to collocate their equipment and access the network. The company operates 54 data centers and provides facilities to 3,035 buildings and on-net services to 1,817 to multi-tenant office buildings. It serves primarily to small and medium-sized businesses, communications service providers, and other bandwidth-intensive organizations. Cogent Communications Holdings, Inc. was founded in 1999 and is headquartered in Washington, the District of Columbia.

How the Company Makes Money

Cogent Communications primarily generates revenue through the provision of internet access and data transport services. Its key revenue streams include selling dedicated internet access to business customers, providing virtual private network (VPN) services, and offering colocation and data center services where clients can house their servers and network equipment. Additionally, Cogent earns revenue from interconnections with other internet service providers. The company benefits from its strategic presence in numerous high-demand markets and data centers worldwide, allowing it to cater to a wide array of industries and maintain a steady revenue flow. Significant partnerships with various telecommunications carriers and content delivery networks further bolster its market position and revenue potential.

Cogent Comms Financial Statement Overview

Summary

Cogent Comms faces significant financial challenges, characterized by unstable income and cash flow, combined with a highly leveraged balance sheet. The lack of recent revenue data adds further uncertainty. Strategic improvements in profitability and debt management are critical to enhancing financial health.

Income Statement

Cogent Comms has shown inconsistent profitability with a significant net loss in the latest year. The absence of revenue data for the latest period prevents calculation of current margins, but past data shows volatile EBIT and EBITDA margins. The company experienced revenue growth until 2023, but the lack of current revenue details raises concerns about recent performance.

Balance Sheet

The balance sheet indicates a challenging financial position with negative stockholders' equity, suggesting a high degree of leverage. The consistently negative equity raises concerns about long-term financial stability. The debt-to-equity ratio is not calculable due to negative equity, but the high total debt suggests significant leverage risks.

Cash Flow

Cash flow analysis shows negative free cash flow in the latest year, reflecting difficulties in generating cash. Operating cash flow is negative, indicating challenges in sustaining operational cash requirements. Previous years show fluctuating free cash flow, highlighting instability in cash generation.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
783.81M	940.92M	599.60M	589.80M	568.10M
	Gross Profit
152.23M	396.69M	371.45M	363.46M	348.95M
	EBIT
-239.03M	-129.33M	113.96M	119.23M	106.92M
	EBITDA
169.60M	1.56B	208.43M	201.08M	190.47M
	Net Income Common Stockholders
-204.07M	1.27B	5.15M	48.19M	6.22M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
15.34M	75.09M	223.78M	319.61M	371.30M
	Total Assets
3.17B	3.21B	1.01B	984.56M	1.00B
	Total Debt
416.15M	1.83B	1.36B	1.26B	1.21B
	Net Debt
400.82M	1.75B	1.13B	941.67M	839.96M
	Total Liabilities
2.95B	2.60B	1.53B	1.36B	1.29B
	Stockholders Equity
222.85M	609.56M	-518.63M	-373.10M	-293.17M
Cash Flow		Free Cash Flow
-8.64M	-112.29M	94.74M	100.34M	84.37M
	Operating Cash Flow
-8.64M	17.34M	173.71M	170.26M	140.32M
	Investing Cash Flow
21.49M	76.73M	-78.97M	-69.92M	-55.95M
	Financing Cash Flow
105.92M	-257.85M	-144.85M	-140.82M	-116.00M

Cogent Comms Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 56.46
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CCOI, the sentiment is Negative. The current price of 56.46 is above the 20-day moving average (MA) of 53.22, below the 50-day MA of 62.53, and below the 200-day MA of 71.20, indicating a neutral trend. The MACD of -2.09 indicates Negative momentum. The RSI at 49.41 is Neutral, neither overbought nor oversold. The STOCH value of 89.55 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CCOI.

Cogent Comms Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZD	63 Neutral	$1.30B	23.92	3.40%	―	2.76%	58.98%
Sector *	59 Neutral	$13.76B	7.64	-1.94%	3.86%	2.38%	-36.56%
SBGI	58 Neutral	$1.07B	3.27	71.43%	6.85%	13.21%	―
TDS	58 Neutral	$3.68B	―	-0.54%	0.43%	-3.80%	83.27%
SHEN	52 Neutral	$657.19M	―	-4.05%	0.87%	14.16%	-443.30%
GSAT	46 Neutral	$2.58B	―	-17.12%	―	11.86%	-140.69%
CCOI	45 Neutral	$2.78B	102.75	-49.03%	7.24%	10.12%	-115.93%

Cogent Comms Corporate Events

Cogent Comms Prices $174.4 Million IPv4 Revenue Notes

On April 4, 2025, Cogent Communications Holdings, Inc. announced that a special-purpose, bankruptcy remote, indirect wholly owned subsidiary priced $174.4 million of secured Internet Protocol version 4 (IPv4) address revenue term notes, with an anticipated repayment term of five years. The notes are secured by Cogent’s IPv4 addresses and customer accounts, and the proceeds will be used for general corporate purposes. The transaction is expected to close around April 11, 2025, subject to closing conditions, and is offered to qualified institutional buyers and certain accredited investors in compliance with U.S. securities regulations.